The European Commission and the High Representative for the Common Foreign and Security Policy have jointly released an enlightening report on the Generalized Scheme of Preferences (GSP), revealing its significant role in fostering economic stability and sustainable development in low-income countries. Amidst global uncertainties, the GSP, the EU’s primary trade policy tool aiding developing countries’ exports to the bloc, has achieved remarkable success.
A record-breaking €80.6 billion in preferential imports from 65 GSP beneficiary countries was reported in 2022. The GSP has been a lifeline for these countries during challenging times, including the Covid-19 pandemic and the repercussions of Russia’s military actions against Ukraine.
The report shines a spotlight on GSP+, a special arrangement for sustainable development and good governance, noting its effectiveness in enhancing standards in human and labour rights, environmental and climate protection, and good governance. Significant strides have been made in areas such as women’s and children’s rights, combating torture and ill-treatment, and eliminating child and forced labour in many beneficiary countries. Uzbekistan’s accession to GSP+ in April 2021, following the eradication of forced and child labour in its cotton industry, and Tajikistan’s application in April 2023 underscore the appeal of the arrangement.
Despite notable progress, challenges remain, particularly in areas like freedom of expression, domestic violence, anti-corruption efforts, and judicial independence. The EU remains vigilant, conducting monitoring missions and providing financial and technical support to ensure compliance with GSP+ obligations.
Environmental challenges are particularly acute for many GSP beneficiaries, who, despite ambitious climate commitments, often face capacity and resource limitations. The GSP, therefore, extends beyond trade and economic development, playing a pivotal role in dialogues on labour rights, human rights, and environmental protection, aligning closely with the EU’s broader foreign policy objectives.
The GSP, the cornerstone of the EU’s unilateral trade policy, supports vulnerable developing countries by reducing or eliminating import duties on products imported to the EU. This policy, encompassing 65 beneficiary countries and nearly 2 billion people, is conditioned on the respect of international standards on human rights, labour rights, environment, climate, and good governance.
To cater to varied needs, the GSP includes three arrangements: the Standard GSP for low and lower-middle-income countries, GSP+ for countries implementing 27 international conventions, and the EBA (Everything But Arms) for the least developed countries. The report is accompanied by detailed Staff Working Documents covering the GSP+ beneficiaries between 2020 and 2022, including Armenia and three EBA beneficiaries.
With the current GSP Regulation expiring at the end of 2023, a legislative process is underway for its revision. Meanwhile, a proposed extension until the end of 2027 is awaiting final approval by the European Parliament and the Council, ensuring continuity and legal certainty.